El Salvador’s Congress has swiftly approved a bill to amend and potentially scale back the country’s Bitcoin adoption strategy after agreeing to a deal with the International Monetary Fund (IMF) in December 2024.
El Salvador Makes Bitcoin Acceptance Voluntary
According to a Jan.30 report from Reuters, El Salvador lawmakers have voted to scale back its ambitious Bitcoin law. Specifically, the bill to scale down its Bitcoin experiment was approved by Congress with 55 votes in favor and two votes against. Notably, the bill was ratified just minutes after President Nayib Bukele sent it to the assembly.
Last month, El Salvador reached a deal with the IMF that included a $1.4 billion loan to fund the nation’s reform agenda and address its balance of payments. In exchange for the loan, the IMF deal required El Salvador to scale back its involvement in BTC and make the crypto’s acceptance voluntary and optional for the country’s private sector merchants.
In December 2021, the tiny Latin American nation became the first country in the world to formally adopt Bitcoin as a legal tender, forcing all businesses to accept it if they had the means to do so. But under the terms of the new law, accepting Bitcoin is now voluntary.
El Salvador also agreed to stop accepting tax payments in Bitcoin and to “gradually unwind” the government-issued Chivo wallet.
Ruling party legislator Elisa Rosales reportedly said that the changes were needed to guarantee Bitcoin’s “permanence as legal tender” while facilitating its “practical implementation.”
The IMF has had a problem with El Salvador’s Bitcoin Law since 2021, claiming the strategy raised “a number of macroeconomic, financial and legal issues.” However, President Nayib Bukele had in the past brushed off pressure from the international lender.
Despite finally bending the knee to the IMF, El Salvador has reaffirmed its commitment to adding more Bitcoin to its national reserves. The country, led by its pro-Bitcoin millennial leader, has snatched up 6,050.18 BTC, worth $633 million at current prices, with an all-time return of 127.5%.
However, Bukele admitted in August that the BTC experiment had witnessed mixed results, citing slower-than-expected adoption of the foremost crypto.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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